Painted Post water sales appeal in court Monday

A panel of judges will hear arguments Monday in a challenge to the Village of Painted Post’s sales of water for use in Pennsylvania gas drilling.

The Leader staff

A panel of judges will hear arguments Monday in a challenge to the Village of Painted Post’s sales of water for use in Pennsylvania gas drilling.

The project, which began in 2012, was challenged by environmental groups Sierra Club, People for a Healthy Environment and the Coalition to Protect New York, along with five local residents.

In March 2013, a judge ruled that officials failed to comply with the state Environmental Quality Review Act (SEQRA) in approving the project, and ordered a halt to the operation. The ruling voided the water sale agreement and the lease on the land where a loading station was built to transfer the water.

SWEPI LP - a Shell Oil subsidiary that was buying the village’s water - appealed the decision to the New York Fourth Department Appellate Division, which covers western New York.

On Monday, a panel of judges in Rochester will hear oral arguments from attorneys on both sides. Each will get 15 minutes to summarize their case and answer any questions the judges may ask.

Central to the case is whether the village was justified in considering the water “surplus property” under state law, which can be sold off without an environmental review.

In the decision that halted the sales, trial Judge Kenneth Fisher said: “(A) large volume daily withdrawal of a resource vital to the well being of our state is not a mere surplus sale of Village property akin to selling a bus or fire engine no longer needed by the Village.”

A related issue in the case was the decision to separate the construction of the loading station for the water from the water sales in the environmental review of the project.

The project involves pumping a maximum of one million gallons of water per day from the village water system, loading it onto railroad tankers and shipping it to Tioga County, Pa., via the Wellsboro & Corning Railroad, where it would be sold to SWEPI for use in shale gas drilling.

The deal guaranteed the village a minimum $3.2 million, and could have been worth around $4 million annually if the maximum was sold. The village would have been required to use the funds to make improvements to its aging municipal water system, with any extra money going into the general fund.

A ruling from the appellate panel could take weeks or months.

If the losing side chooses to appeal that ruling, they could bring the case the state Court of Appeals. But like the federal Supreme Court, the state Court of Appeals doesn’t take every case – only ones they think present significant legal issues to rule on.